II 

118TH CONGRESS 

2D SESSION S. 5262 

To address maternity care shortages and promote optimal maternity outcomes 

by expanding access to birth centers and exploring more effective payment models for birth center care, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 25, 2024 

Mr. LUJA ́N introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To address maternity care shortages and promote optimal 

maternity outcomes by expanding access to birth centers 

and exploring more effective payment models for birth 

center care, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Better Availability of 

5 Birth Centers Improves Outcomes and Expands Savings 

6 Act’’ or the ‘‘BABIES Act’’. 


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1 SEC. 2. GRANTS TO IMPROVE ACCESS TO FREESTANDING 

2 BIRTH CENTER SERVICES. 

3 Part P of title III of the Public Health Service Act 

4 (42 U.S.C. 280g et seq.) is amended by adding at the end 

5 the following: 

6 ‘‘SEC. 399V–8. STRONG START BIRTH CENTER GRANTS TO 

7 ASSIST BIRTH CENTERS WITH START-UP OR 

8 EXPANSION COSTS TO EXPAND ACCESS TO 

9 BIRTH CENTER SERVICES IN UNDERSERVED 

10 AREAS. 

11 ‘‘(a) IN GENERAL.—The Secretary, acting through 

12 the Administrator of the Health Resources and Services 

13 Administration, may award grants to eligible birth centers 

14 that are accredited, or intend to seek accreditation, as 

15 birth centers by a nationally recognized accrediting body 

16 such as the Commission for the Accreditation of Birth 

17 Centers, or that have the intention of seeking such accred18 itation, for the purposes described in subsection (b). 

19 ‘‘(b) USE OF FUNDS.—A birth center receiving a 

20 grant under this section may use such grant funds for any 

21 of the following purposes: 

22 ‘‘(1) Renovation, expansion, or construction of 

23 a birth center facility. 

24 ‘‘(2) Purchasing or updating equipment for a 

25 birth center. 


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1 ‘‘(3) Accreditation and State licensure activi2 ties. 

3 ‘‘(c) GRANTS; GRANT AMOUNTS.—For each of fiscal 

4 years 2025 through 2029, the Secretary shall award 

5 grants under this section to up to 15 birth centers, each 

6 in an amount of not less than $300,000 and not more 

7 than $500,000. 

8 ‘‘(d) SPECIAL CONSIDERATIONS.—In awarding 

9 grants under this section, the Secretary shall give special 

10 consideration to an eligible birth center that— 

11 ‘‘(1) is located in, or offers services to, a geo12 graphic area that— 

13 ‘‘(A) has been designated under section 

14 332 as a health professional shortage area with 

15 respect to maternity care; or 

16 ‘‘(B) has maternity care outcomes that are 

17 below a threshold established by the Secretary; 

18 and 

19 ‘‘(2) has not previously received a grant under 

20 this section. 

21 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There 

22 is authorized to be appropriated to carry out this section 

23 $5,000,000 for the period of fiscal years 2025 through 

24 2029.’’. 


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1 SEC. 3. MEDICAID DEMONSTRATION PROGRAM TO IM2 PROVE FREESTANDING BIRTH CENTER SERV3 ICES. 

4 Section 1903 of the Social Security Act (42 U.S.C. 

5 1396b) is amended by adding at the end the following new 

6 subsection: 

7 ‘‘(cc) DEMONSTRATION PROGRAM TO IMPROVE

8 FREESTANDING BIRTH CENTER SERVICES.— 

9 ‘‘(1) AUTHORITY.—The Secretary shall conduct 

10 a demonstration program for the purpose of explor11 ing more effective payment models for birth center 

12 care in order to improve access to, and the quality 

13 and scope of, freestanding birth center services for 

14 women with a low-risk pregnancy who are eligible 

15 for medical assistance under the State plan under 

16 this title or under a waiver of such plan. 

17 ‘‘(2) DEADLINES FOR PARTICIPATION CRITERIA, 

18 PROSPECTIVE PAYMENT SYSTEM; PLANNING

19 GRANTS.— 

20 ‘‘(A) PARTICIPATION AND PROSPECTIVE

21 PAYMENT SYSTEM DEADLINE.—Not later than 

22 1 year after the date of the enactment of this 

23 subsection, the Secretary shall do the following: 

24 ‘‘(i) PUBLICATION OF PARTICIPATION

25 CRITERIA FOR FREESTANDING BIRTH CEN26 TERS.— 


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1 ‘‘(I) IN GENERAL.—The Sec2 retary shall publish criteria for a free3 standing birth center to be certified 

4 by a State for purposes of partici5 pating in a State demonstration pro6 gram conducted under this subsection. 

7 ‘‘(II) REQUIREMENTS.—The cri8 teria required to be published under 

9 subclause (I) shall include the fol10 lowing: 

11 ‘‘(aa) ACCREDITATION.—At 

12 the time of certification for pur13 poses of participating in the dem14 onstration program conducted 

15 under this subsection, a free16 standing birth center must be ac17 credited or have completed the 

18 initial phase of accreditation 

19 from an approved, nationally-rec20 ognized birth center accreditation 

21 body, as determined by the Sec22 retary. 

23 ‘‘(bb) LICENSURE AND

24 OTHER REQUIREMENTS.—A free25 standing birth center shall— 


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1 ‘‘(AA) be licensed, or 

2 otherwise approved, by the 

3 State to provide prenatal, 

4 labor and delivery, 

5 postpartum, newborn care, 

6 and other ambulatory serv7 ices for which medical as8 sistance is available under 

9 the State plan or waiver 

10 under this title; and 

11 ‘‘(BB) comply with 

12 such other requirements re13 lating to the health and 

14 safety of individuals who re15 ceive services furnished by 

16 the facility as the State shall 

17 establish. 

18 ‘‘(cc) CARE COORDINA19 TION.—A freestanding birth cen20 ter shall be able to meet care co21 ordination requirements estab22 lished by the Secretary, including 

23 requirements to coordinate care 

24 across settings and providers to 

25 ensure seamless transitions for 


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1 patients across the full spectrum 

2 of health services, and shall be 

3 able to engage in consultation for 

4 higher level maternity care serv5 ices, non-maternity care services, 

6 and behavioral health needs, 

7 which may include plans for con8 sultation, collaboration and refer9 ral, and arrangements with the 

10 following: 

11 ‘‘(AA) Federally quali12 fied health centers (and as 

13 applicable, rural health clin14 ics) to provide Federally 

15 qualified health center serv16 ices (and as applicable, rural 

17 health clinic services) to the 

18 extent such services are not 

19 provided directly through 

20 the birth center. 

21 ‘‘(BB) Other outpatient 

22 clinics, including licensed 

23 midwifery and physician 

24 practices. 


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1 ‘‘(CC) Inpatient acute 

2 care facilities with obstet3 rical care units. 

4 ‘‘(dd) SCOPE OF SERV5 ICES.—As determined by the Sec6 retary, a freestanding birth cen7 ter shall be able to provide 

8 peripartum care for women with 

9 a low-risk pregnancy and for 

10 newborns, consistent with evi11 dence-based guidelines. 

12 ‘‘(ee) CAPABILITIES.—A 

13 freestanding birth center shall 

14 have the following capabilities: 

15 ‘‘(AA) In addition to 

16 the requirements specified 

17 under section 431.53 of title 

18 42, Code of Federal Regula19 tions, and any successor reg20 ulation (relating to assur21 ance of transportation), the 

22 capability and equipment to 

23 provide prenatal, labor and 

24 delivery, postpartum, and 

25 newborn care for women 


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1 with a low-risk pregnancy, 

2 readiness at all times to ini3 tiate emergency procedures 

4 to meet unexpected needs of 

5 such women and of 

6 newborns within the center, 

7 including at least 2 qualified 

8 staff on-site at every birth, 

9 and the ability to facilitate 

10 transport to an acute care 

11 hospital with an obstetrical 

12 care unit when necessary. 

13 ‘‘(BB) An established 

14 transfer plan with a receiv15 ing hospital with an obstet16 rical care unit with policies 

17 and procedures for timely 

18 transport. 

19 ‘‘(CC) Medical con20 sultation available from a li21 censed board-certified physi22 cian with admitting privi23 leges in obstetrics at a near24 by hospital, as defined by 

25 State law or regulation. 


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1 ‘‘(DD) Data collection, 

2 storage, and retrieval, in3 cluding data on intrapartum 

4 and postpartum maternal 

5 and newborn transfer rates 

6 and hospital admissions. 

7 ‘‘(EE) The ability to 

8 initiate and document qual9 ity improvement programs 

10 as required by accreditation 

11 that include efforts to maxi12 mize patient safety, such as 

13 safety checklists, validated 

14 training and competency of 

15 staff, and emergency pre16 paredness and drills. 

17 ‘‘(ff) HEALTH CARE PRO18 VIDERS.—A freestanding birth 

19 center shall employ, or have care 

20 delivery arrangements with, both 

21 of the following: 

22 ‘‘(AA) A physician li23 censed to practice within the 

24 State or jurisdiction of the 

25 birth center. 


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1 ‘‘(BB) A midwife that 

2 meets or exceeds the edu3 cation and training stand4 ards of the International 

5 Confederation of Midwives 

6 and who is licensed to prac7 tice within the jurisdiction of 

8 the birth center. 

9 ‘‘(gg) NON-DUPLICATION.— 

10 In carrying out this subsection, 

11 the Secretary shall, with respect 

12 to a State participating in the 

13 demonstration program, establish 

14 procedures to prevent, to the 

15 greatest extent practicable, the 

16 provision of, or payment for, 

17 services under the demonstration 

18 program for which medical as19 sistance is available under the 

20 State plan under this title or 

21 waiver of such plan. 

22 ‘‘(ii) GUIDANCE ON DEVELOPMENT OF

23 PROSPECTIVE PAYMENT SYSTEM FOR

24 TESTING UNDER STATE DEMONSTRATION

25 PROGRAMS.— 


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1 ‘‘(I) IN GENERAL.—The Sec2 retary shall issue guidance for States 

3 participating in a demonstration pro4 gram conducted under this subsection 

5 to establish a prospective payment 

6 system that shall only apply to free7 standing birth center services that— 

8 ‘‘(aa) meet the criteria es9 tablished under clause (i); and 

10 ‘‘(bb) are furnished by a 

11 freestanding birth center partici12 pating in such a demonstration 

13 program. 

14 ‘‘(II) REQUIREMENTS.—The 

15 guidance issued by the Secretary 

16 under subclause (I) shall, to the 

17 greatest extent practicable, provide 

18 for— 

19 ‘‘(aa) a partial facility pay20 ment based on units in the case 

21 that a pregnant woman is admit22 ted in labor and then needs to be 

23 transferred to the hospital in 

24 labor before the birth of the 

25 baby; 


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1 ‘‘(bb) a facility payment for 

2 therapeutic rest or for observa3 tion short stays to rule out labor; 

4 ‘‘(cc) ensuring payment for 

5 the newborn and mother as 2 

6 separate facility payment compo7 nents; 

8 ‘‘(dd) ensuring payment for 

9 nitrous oxide and hydrotherapy 

10 supplies costs for pain relief; 

11 ‘‘(ee) ensuring payment for 

12 all professional services of health 

13 professionals involved in the de14 livery of care in a birth center, 

15 which may include— 

16 ‘‘(AA) 3 or more pre17 natal office visits; 

18 ‘‘(BB) observation and 

19 triage; 

20 ‘‘(CC) newborn exam 

21 and care; and 

22 ‘‘(DD) multiple 

23 postpartum, mother, and 

24 newborn visits, as needed; 


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1 ‘‘(ff) ensuring payment for 

2 partial prenatal and postpartum 

3 care episodes or for prenatal care 

4 only with planned delivery in the 

5 hospital and returning for 

6 postpartum care in the birth cen7 ter; and 

8 ‘‘(gg) payment for services 

9 provided within— 

10 ‘‘(AA) in the case of a 

11 pregnant woman, the period 

12 that commences upon the 

13 confirmation of pregnancy 

14 when the woman is accepted 

15 into care at the freestanding 

16 birth center, continues 

17 through prenatal care, labor, 

18 and delivery, and ends at 

19 the completion of the 

20 postpartum period (as de21 fined by State law or regula22 tion) with documentation of 

23 a plan for continued well 

24 woman care, inclusive of at 


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1 least 2 postpartum care vis2 its; and 

3 ‘‘(BB) in the case of a 

4 newborn, a period that con5 tinues through the first 28 

6 days of life with documenta7 tion of continued infant 

8 care. 

9 ‘‘(iii) PUBLICATION OF AN RFP FOR

10 STATES TO APPLY FOR THE DEMONSTRA11 TION PROGRAM.— 

12 ‘‘(I) IN GENERAL.—The Sec13 retary shall publish a request for pro14 posal (in this clause referred to as an 

15 ‘RFP’) for States to establish and test 

16 a prospective payment system for 

17 freestanding birth center services 

18 that— 

19 ‘‘(aa) meets the criteria es20 tablished under clause (i); and 

21 ‘‘(bb) are furnished by a 

22 freestanding birth center partici23 pating in a demonstration pro24 gram under this subsection. 


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1 ‘‘(II) REQUIREMENTS.—The 

2 RFP published by the Secretary 

3 under subclause (I) shall, to the 

4 greatest extent practicable, include 

5 the following parameters: 

6 ‘‘(aa) States must have a 

7 minimum number of established 

8 or developing birth centers. 

9 ‘‘(bb) States must have a 

10 mechanism to recognize or license 

11 birth centers. 

12 ‘‘(cc) States must have at 

13 least 1 area that has been des14 ignated a maternity care desert. 

15 ‘‘(dd) States must have 

16 areas with maternity care out17 comes that are below a certain 

18 threshold, as determined by the 

19 Secretary. 

20 ‘‘(ee) States should rep21 resent a diverse selection of geo22 graphic areas, including rural 

23 and underserved areas. 

24 ‘‘(ff) Preference should be 

25 given to States that demonstrate 


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1 the potential to expand the avail2 ability of and access to maternity 

3 care services in a demonstration 

4 area and increase the quality of 

5 services provided by freestanding 

6 birth centers without increasing 

7 net Federal spending, as deter8 mined by the Secretary. 

9 ‘‘(III) REQUIRED INFORMA10 TION.—A State application to conduct 

11 a demonstration program under this 

12 subsection shall include the following: 

13 ‘‘(aa) A description of the 

14 target population of individuals 

15 who are eligible for medical as16 sistance under the State plan 

17 under this title or under a waiver 

18 of such plan and are to be served 

19 under the demonstration pro20 gram. 

21 ‘‘(bb) A list of the partici22 pating freestanding birth centers 

23 in the State. 

24 ‘‘(cc) Verification that each 

25 participating freestanding birth 


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1 center meets the participation 

2 criteria established in paragraph 

3 (2)(A)(i). 

4 ‘‘(dd) A description of the 

5 scope of the freestanding birth 

6 center services available under 

7 the State plan under this title or 

8 waiver of such plan for women 

9 with a low-risk pregnancy that 

10 will be paid for under the pro11 spective payment system tested 

12 in the demonstration program. 

13 ‘‘(ee) Verification that the 

14 State has agreed to pay for such 

15 services at the rate established 

16 under the prospective payment 

17 system. 

18 ‘‘(ff) An assurance that the 

19 State will require freestanding 

20 birth centers to submit to the 

21 State, and that the State will 

22 submit to the Secretary, such in23 formation and data as the State 

24 or Secretary may require relating 

25 to the demonstration program or 


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1 an episode of care for such a 

2 pregnant woman or newborn. 

3 ‘‘(gg) Such other informa4 tion as the Secretary may require 

5 relating to the demonstration 

6 program, including with respect 

7 to determining the soundness of 

8 the proposed prospective payment 

9 system. 

10 ‘‘(IV) DEADLINES FOR SUBMIS11 SION OF RFP APPLICATIONS.—The 

12 deadline for a State to submit an ap13 plication to participate in the dem14 onstration program conducted under 

15 this subsection shall be the date that 

16 is 90 days after the date on which the 

17 Secretary publishes the RFP under 

18 subclause (I). 

19 ‘‘(B) PLANNING GRANTS.— 

20 ‘‘(i) IN GENERAL.—Not later than 18 

21 months after the date of enactment of this 

22 subsection, the Secretary shall award a 

23 planning grant to up to 6 States for the 

24 purpose of developing a detailed proposal 


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1 to conduct a demonstration program de2 scribed in paragraph (3). 

3 ‘‘(ii) USE OF FUNDS.—A State award4 ed a planning grant under this subpara5 graph shall use the funds awarded under 

6 such grant to— 

7 ‘‘(I) solicit input with respect to 

8 the development of the demonstration 

9 program from patients, providers (in10 cluding certified nurse-midwives, other 

11 midwives licensed within the State, 

12 and physicians), and other stake13 holders; 

14 ‘‘(II) secure participation of free15 standing birth centers that meet the 

16 criteria established under subpara17 graph (A)(i), including by providing 

18 support for such centers to meet that 

19 criteria (including accreditation) in 

20 order to maximize the number of free21 standing birth centers participating in 

22 the demonstration program; and 

23 ‘‘(III) in accordance with the 

24 guidance issued under subparagraph 

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1 ment system which the State shall use 

2 for making payments to freestanding 

3 birth centers participating in the dem4 onstration program. 

5 ‘‘(3) STATE DEMONSTRATION PROGRAMS.— 

6 ‘‘(A) IN GENERAL.—Not later than 2 years 

7 after the date of enactment of this subsection, 

8 the States selected by the Secretary under para9 graph (2)(B)(i) shall launch their demonstra10 tion programs. 

11 ‘‘(B) LENGTH OF DEMONSTRATION PRO12 GRAMS.—A State conducting a demonstration 

13 program in accordance with this paragraph 

14 shall conduct the program for a 4-year period. 

15 ‘‘(C) PAYMENT FOR SERVICES PROVIDED

16 BY FREESTANDING BIRTH CENTERS.— 

17 ‘‘(i) IN GENERAL.—During the first 

18 16 fiscal quarter period (or any portion of 

19 such period) that the State participates in 

20 the demonstration program, the Secretary 

21 shall pay a State participating in a dem22 onstration program under this subsection 

23 the Federal matching percentage specified 

24 in clause (ii) for amounts expended by the 

25 State to provide freestanding birth center 


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1 services that meet the criteria established 

2 under paragraph (2)(A)(i) and are fur3 nished by a freestanding birth center in ac4 cordance with the prospective payment sys5 tem for such services established by the 

6 State pursuant to the guidance issued 

7 under paragraph (2)(A)(ii) to individuals 

8 who are enrolled in the State Medicaid 

9 program. 

10 ‘‘(ii) FEDERAL MATCHING PERCENT11 AGE.—Subject to clause (iii), the Federal 

12 matching percentage specified in this 

13 clause is, with respect to medical assist14 ance described in clause (i) that is fur15 nished by a State participating in an ongo16 ing demonstration program under this sub17 section— 

18 ‘‘(I) to a newly eligible individual 

19 described in paragraph (2) of section 

20 1905(y), the matching rate applicable 

21 under paragraph (1) of that section 

22 (as increased under section 1905(ii), 

23 if applicable); and 

24 ‘‘(II) to an individual who is not 

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1 scribed) but who is eligible for medical 

2 assistance under the State Medicaid 

3 program, the enhanced FMAP appli4 cable to the State. 

5 ‘‘(iii) APPLICATION OF HIGHER

6 MATCH.—Clause (ii) shall not apply in the 

7 case of State expenditures described in 

8 such clause if the application of such 

9 clause would result in a lower Federal 

10 medical assistance percentage for such ex11 penditures than would otherwise apply 

12 without the application of such clause. 

13 ‘‘(iv) LIMITATION.—Payments shall 

14 be made under this subparagraph to a 

15 State only for amounts expended by the 

16 State to provide medical assistance for 

17 freestanding birth center services that are 

18 described in the demonstration program 

19 application submitted by the State and ap20 proved by the Secretary. 

21 ‘‘(v) ADMINISTRATIVE EXPENSES.— 

22 Amounts expended by a State to conduct a 

23 demonstration program in accordance with 

24 this paragraph shall be considered, for pur25 poses of subsection (a)(7), to be necessary 


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1 for the proper and efficient administration 

2 of the State plan. 

3 ‘‘(D) WAIVER OF STATEWIDENESS RE4 QUIREMENT.—The Secretary shall waive the re5 quirements of section 1902(a)(1) (relating to 

6 Statewideness), section 1902(a)(10)(B) (relat7 ing to comparability), and any other provision 

8 of this title which would be directly contrary to 

9 the authority under this subsection as may be 

10 necessary for a State to conduct a demonstra11 tion program in accordance with this para12 graph. 

13 ‘‘(E) ANNUAL REPORTS.— 

14 ‘‘(i) IN GENERAL.—Not later than 2 

15 years after the date on which the first 

16 State is selected to conduct a demonstra17 tion program under this subsection, and 

18 annually thereafter, based on information 

19 and data submitted by States in accord20 ance with the assurance provided under 

21 paragraph (2)(A)(iii)(III)(ff), the Sec22 retary shall submit to Congress an annual 

23 report on all State demonstration pro24 grams conducted under this subsection. 

25 Each such report shall include with respect 


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1 to each such State demonstration pro2 gram— 

3 ‘‘(I) an assessment of clinical 

4 outcomes for maternity services pro5 vided by freestanding birth centers 

6 participating in the demonstration 

7 program for individuals who are eligi8 ble for medical assistance under a 

9 State plan under this title or under a 

10 waiver of such plan and are women 

11 with a low-risk pregnancy with out12 comes in comparable demographic and 

13 geographic areas, including with re14 spect to— 

15 ‘‘(aa) the number of births 

16 and data on intrapartum and 

17 postpartum maternal and new18 born transfer rates and hospital 

19 admissions; and 

20 ‘‘(bb) the rate of primary 

21 and repeat cesarean sections, 

22 preterm births, and neonatal in23 tensive care unit admissions; and 

24 ‘‘(II) an assessment of the im25 pact of all the State demonstration 


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1 programs conducted under this sub2 section on the Federal and State costs 

3 relating to providing freestanding 

4 birth center services for individuals 

5 who are eligible for medical assistance 

6 under a State plan under this title or 

7 under a waiver of such plan and are 

8 women with a low-risk pregnancy (in9 cluding with respect to the provision 

10 of inpatient, emergency, and ambula11 tory services) and newborn care, com12 pared to the Federal and State costs 

13 related to the provision of— 

14 ‘‘(aa) freestanding birth cen15 ter services to such individuals by 

16 freestanding birth centers outside 

17 of such demonstration programs; 

18 and 

19 ‘‘(bb) traditional maternity 

20 services as provided in non-birth 

21 center clinics and hospital pro22 grams. 

23 ‘‘(ii) RECOMMENDATIONS.—Not later 

24 than 6 months after the end of the third 

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1 ducted under this subsection, the Secretary 

2 shall submit to Congress recommendations 

3 concerning whether such demonstration 

4 program should be continued, expanded, 

5 modified, or terminated. 

6 ‘‘(4) FUNDING.— 

7 ‘‘(A) IN GENERAL.—Out of any funds in 

8 the Treasury not otherwise appropriated, there 

9 is appropriated to the Secretary— 

10 ‘‘(i) for purposes of carrying out para11 graph (2)(B), $3,000,000; and 

12 ‘‘(ii) for purposes of carrying out the 

13 demonstration programs described in para14 graph (3), $24,000,000, to be appropriated 

15 at the rate of $6,000,000 per year for 4 

16 years. 

17 ‘‘(B) AVAILABILITY.—Funds appropriated 

18 under subparagraph (A) shall remain available 

19 until expended. 

20 ‘‘(5) DEFINITIONS.—In this subsection: 

21 ‘‘(A) FREESTANDING BIRTH CENTER

22 SERVICES.—The term ‘freestanding birth center 

23 services’ has the meaning given that term under 

24 section 1905(l)(3)(A) and includes such other 

25 services as the Secretary shall determine for 


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1 purposes of conducting the demonstration pro2 grams described in paragraph (3). 

3 ‘‘(B) LOW-RISK PREGNANCY.—The term 

4 ‘low-risk pregnancy’ means an uncomplicated 

5 singleton term pregnancy with a vertex presen6 tation with an expected uncomplicated birth.’’. 

Æ 


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